Erebuni was founded by King Argishti I (r. ca. 785–753 B.C.) in 782 B.C. It was built on top of a hill called Arin Berd overlooking the Arax River Valley to serve as a military stronghold to protect the kingdom's northern borders. According to Margarit Israelyan, Argishti began the construction of Erebuni after conquering the territories north of Yerevan and west of Lake Sevan, roughly corresponding to where the town of Abovyan is currently located. Accordingly, the prisoners he captured in these campaigns, both men and women, were used to help build his town.

In the autumn of 1950, an archaeological expedition led by Konstantine Hovhannisyan discovered an inscription at Arin Berd dedicated to the city's founding which was carved during Argishti's reign. Two other identical inscriptions have been found at the citadel of Erebuni. The inscription reads:

"By the greatness of the God Khaldi, Argishti, son of Menua, built this mighty stronghold and proclaimed it Erebuni for the glory of Biainili (Urartu) and to instill fear among the king's enemies. Argishti says: The land was a desert, before the great works I accomplished upon it. By the greatness of Khaldi, Argishti, son of Menua, is a mighty king, king of Biainili, and ruler of Tushpa.

Argishti left a similar inscription at the Urartian capital of Tushpa (current-day Van) as well, stating that he brought 6,600 prisoners of war from Khate and Tsupani to populate his new city. Similar to other Urartian cities of the time, it was built on a triangular plan on top of a hill and ensconced by 10-12 meter high ramparts. Behind them, the buildings were separated by central and inner walls. The walls were built from a variety of materials, including basalt, tuff, wood and adobe.Argishti constructed a grand palace here and excavations conducted in the area have revealed that other notable buildings included a colonnaded royal assembly hall, a temple dedicated to Khaldi, a citadel, where the garrison resided, living quarters, dormitories and storerooms. The inner walls were richly and opulently decorated with murals and other wall paintings, displaying religious and secular scenes.

Successive Urartian kings made Erebuni their place of residence during their military campaigns against northern invaders and continued construction work to build up the fortress defences. Kings Sarduri II and Rusa I also utilized Erebuni as a staging site for new campaigns of conquest directed towards the north. In the early sixth century the Urartian state, under constant foreign invasion, collapsed.

The region soon fell under the control of the Achaemenian Empire. The strategic position that Erebuni occupied did not diminish, however, becoming an important center of the satrapy of Armenia.

Despite numerous invasions by successive foreign powers, the city was never truly abandoned and was continually inhabited over the following centuries, eventually branching out to become the city of Yerevan. Erebuni's close affinity to Yerevan was celebrated in a splendid festival held in September 1968, commemorating Erebuni's 2,750th birthday.